Tata Motors cuts prices by up to Rs 1.55 lakh across models from Tiago to Nexon

Tata Motors on Friday announced that it will pass on the entire benefit of the recent GST rate reduction to customers, with price cuts of up to Rs 1.55 lakh across its cars and SUVs, effective September 22, when the revised tax slabs come into force. The company said its entry-level hatchback Tiago will become cheaper by Rs 75,000, while the compact sedan Tigor will see a reduction of Rs 80,000. The Altroz hatchback will witness the steepest cut among small cars, with prices lowered by Rs 1.10 lakh.

Among SUVs, the Punch will be cheaper by Rs 85,000 and the popular Nexon by Rs 1.55 lakh. Tata’s recently launched mid-sized model Curvv will also see a price reduction of Rs 65,000. For the premium Harrier and Safari models, the price will come down by Rs 1.40 lakh and Rs 1.45 lakh, respectively.

Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Ltd. & Tata Passenger Electric Mobility Ltd., said, “The reduction in GST on passenger vehicles, effective 22 September 2025, is a progressive and timely decision that will make personal mobility more accessible for millions across India. In line with the Prime Minister’s vision, the Finance Minister’s intent and our Customer First philosophy, Tata Motors will fully honor the intent and spirit of this reform by passing on the entire benefit of the reduction in GST to our customers.”

GST rates for cars, SUVs

The GST Council recently approved limiting tax slabs to 5 per cent and 18 per cent from September 22, the first day of Navaratri. Under the revised system, petrol, LPG, and CNG vehicles under 1,200 cc and up to 4,000 mm in length, as well as diesel vehicles up to 1,500 cc and 4,000 mm in length, will move to the 18 per cent slab. Vehicles exceeding these thresholds will be taxed at 40 per cent.

Small cars and mini SUVs, including the Tata Punch, Maruti Suzuki Wagon R, and Maruti Suzuki Fronx, will now attract a lower tax rate of 18 per cent, down from 28 per cent previously. Motorcycles under 350 cc and automotive parts will also move to the 18 per cent slab.

Larger vehicles, including popular models such as the Hyundai Creta and Toyota Fortuner, will now fall under the 40 per cent GST rate. However, the overall tax burden may remain moderate, as these vehicles were previously subject to an additional compensation cess of 17-22 per cent, pushing the total tax rate close to 50 per cent. With the cess removed, the revised GST rate may even slightly reduce total taxes on bigger SUVs.

“This decision will not only make vehicles more affordable across all segments, thereby boosting consumer demand, but it will also simplify classification disputes that have long been a source of ambiguity for the industry. The discontinuance of the cess, in particular, will provide crucial support to a sector that is a vital engine of our nation’s economic growth,” said Saurabh Agarwal, Partner and Automotive Tax Leader, EY India.

Hybrid cars and EVs

Hybrid cars, previously taxed at 43 per cent including compensation cess, will now attract 18 per cent GST if they are under 1,200 cc and 4 metres in length, and 40 per cent for larger models. This is expected to encourage manufacturers to develop smaller hybrid vehicles and make them more attractive to cost-conscious consumers. Maruti Suzuki is reportedly working on a hybrid version of its compact SUV Fronx to take advantage of the tax benefit.

For electric vehicles, the GST Council retained the concessional 5 per cent rate, removing any differentiation between premium and standard models. This ensures that domestic EV launches like Tata’s Harrier EV and Mahindra’s XEV 9e, as well as imported models from Tesla, Mercedes-Benz, Audi, BMW, and BYD, remain unaffected by price hikes.